NCPA - National Center for Policy Analysis

The ObamaCare Fraud

January 12, 2011

There are a great many things wrong with ObamaCare, but the biggest is perhaps one that neither party is paying any attention to:  The law will penalize doctors to pay patients and penalize patients to pay doctors, says Shikha Dalmia, a senior analyst at the Reason Foundation.

The most blatant example of this is in the "doc fix" that Congress passed with major bipartisan support earlier this month, saving doctors from a nearly 23 percent cut in Medicare reimbursement that they would have otherwise faced this year.  Congress has been passing this fix every year since 1997, but this time, in an effort to offset its $20 billion price tag, it has included a little twist to squeeze working families called "exchange recapture subsidy."  Under this provision, the government will go after low-wage families to return any excess subsidies they get under the Patient Protection and Affordable Care Act.

  • When the government hands out subsidies, it will use a household's income in the previous year as the basis for guessing what the household is qualified to get in the current year.
  • But if the household's income grows midyear, the subsidy recapture provision will require it to repay anywhere from $600 to $3,500, compared to the $450 that the law originally called for.
  • This will make it very hazardous for poor working families to get ahead.

The subsidy recapture provision -- essentially a tax collection scheme -- means that low-wage, cash-strapped families will have no escape from these perverse tax rates.  Many of them will find themselves owing the government thousands of dollars in back taxes, says Dalmia.

Source:  Shikha Dalmia, "The ObamaCare Fraud," Reason Magazine, December 31, 2010.

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